COMMISSIONER OF INCOME TAX V. R B MASTURLAL AND SONS P LTD

ITR/26/1994

AI Insights

The case revolves around the issue of whether a loss determined on the basis of a belated return of income can be carried forward to subsequent assessment years. The assessee, R B MASTURLAL AND SONS P LTD, filed a belated return for the assessment year 1985-86, which was initially not allowed to carry forward the loss by the Assessing Officer due to the delay in filing. However, the CIT (Appeals) and subsequently the Tribunal, overturned this decision, allowing the carry forward of the loss. The Revenue challenged this decision, leading to the reference to the High Court. The court's decision was influenced by precedents which supported the assessee's position.

• Counselvise Citation: [2005] 140 COUNSELVISE.COM (IT) 740642 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 12-08-2005
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income-tax, Gujarat-IV Vs. Gordhanbhai Jethabhai, Mehsana Ice & Cold Storage Pvt. Ltd. Vs. Commissioner of Income-tax
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: M M BHATT
• Keywords: Assessment Year 1985-86; Belated return; Carry forward of loss; Income Tax
• Section: 256(1)

Judgement Text

"ITR/26/1994 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No.26 of 1994 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA Sd/- HONOURABLE MS.JUSTICE H.N.DEVANI Sd/- ======================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ======================================================= COMMISSIONER OF INCOME TAX - Applicant(s) Versus R B MASTURLAL AND SONS P LTD - Respondent(s) ======================================================= Appearance : MS MM BHATT for Applicant No(s).: 1. NOTICE SERVED for Respondent No(s).: 1. ======================================================= CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MS.JUSTICE H.N.DEVANI Date : 12/08/2005 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE D.A.MEHTA) 1. The Income-tax Appellate Tribunal, Ahmedabad Bench 'B' has referred the following question under Section 256(1) of the Income-tax Act, 1961 (the Act) at the instance of the Commissioner of Income-tax: ITR/26/1994 2/4 JUDGMENT “Whether, the Appellate Tribunal is right in law and on facts in directing the ITO to allow carry forward of loss determined on the basis of belated return of income?” 2. The Assessment Year is 1985-86 and the relevant accounting period is calender year 1984. The assessee filed return of income showing loss of Rs.1,19,280/- on 27th September, 1985. The assessment was finalized by the Assessing Officer on 28th December, 1987, computing the total loss at Rs.93,587/-. However, he did not permit the loss determined to be carried forward by observing as under: “..... Since the return is late the loss determined is not allowed to be carried forward.” 3. The assessee carried the matter in appeal before the CIT (Appeals) who, vide his order dated 30th November, 1988, directed the Assessing Officer to allow carry forward of loss. It is found by the Commissioner (Appeals) that the return which was due on 30th June, 1985 had been filed on 27th September, 1985. That the assessee had filed an extension application in Form No.6 on 27th June, 1985 seeking ITR/26/1994 3/4 JUDGMENT extension upto 30th September, 1985. In light of the ratio laid down by this Court in the case of Commissioner of Income-tax, Gujarat-IV Vs. Gordhanbhai Jethabhai, [1983] 142 ITR 84 (Guj.), the Commissioner (Appeals) held that the assessee was entitled to carry forward the loss as there was no reply from the Assessing Officer as regards the extension application filed in Form No.6. 4. The Revenue carried the matter in appeal before the Tribunal. Vide order dated 4th June, 1992 the departmental appeal was dismissed by the Tribunal upholding the view adopted by the CIT (Appeals). 5. Heard Ms.M.M.Bhatt, learned Standing Counsel appearing on behalf of the applicant – Revenue. Though served there is no appearance on behalf of the respondent – assessee. 6. Ms.M.M.Bhatt has invited attention to decision of this Court rendered in Income Tax Reference No.107 of 1993 dated 15th March, 2003 in the case of Mehsana Ice & Cold Storage Pvt. Ltd. Vs. Commissioner of Income-tax. It was submitted by her that the issue in question stands concluded by the aforesaid ITR/26/1994 4/4 JUDGMENT decision. 7. In light of the aforesaid fact situation and the ratio laid down in decisions of this Court in case of Gordhanbhai Jethabhai and Mehsana Ice & Cold Storage Pvt. Ltd. (supra), the question referred is answered in the affirmative i.e. in favour of the assessee and against the Revenue. The Tribunal was justified in law in directing the Assessing Officer to allow carry forward of the loss determined. 8. The reference stands disposed of accordingly. There shall be no order as to costs. Sd/- [ D.A. MEHTA, J ] Sd/- [ H.N. DEVANI, J ] *** Bhavesh* "